Good afternoon. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the CalAmp First Quarter Conference Call. All lines have been placed on mute to avoid any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions). Thank you. Joanne Keates, Director of Corporate Communications; you may begin your conference.

Joanne Keates

Thank you, Stephanie. Good afternoon and welcome to CalAmp’s fiscal 2013 first quarter conference call. With us today are CalAmp’s President and Chief Executive Officer, Michael Burdiek and Chief Financial Officer, Rick Vitelle.

Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward-looking statements. Words such as may, will, expect, intend, plan, believe, seek, could, estimate, judgment, targeting, should, anticipate, goal, and variations of these words, and similar expressions, are intended to identify forward-looking statements.

Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors including product demand, competitive pressures and pricing declines in the company’s satellite and wireless markets, the timing of customer approvals of new product designs, intellectual property infringement claims, interruptions or failure of our internet based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, and other risks and uncertainties that are described in the company’s annual report on Form 10-K for fiscal 2012 as filed April, 26 with the SEC.

Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. With that said, it’s now my pleasure to turn the call over to CalAmp’s President and CEO Michael Burdiek.

Michael Burdiek

Thank you, Joanne. Good afternoon and thank you for joining us today to discuss CalAmp’s fiscal 2013 first quarter. I will begin today’s call with a review of our financial and operational highlights and Rick Vitelle will provide additional details about our financial results. I will wrap up with our business outlook and guidance for fiscal 2013 second quarter, along with some concluding remarks. This will be followed by a question-and-answer session.

Our strong financial performance is the first quarter was attributable to continued execution of our business strategy, which resulted in significant growth in revenue and earnings. The wireless DataCom segment recorded impressive year-over-year revenue growth of 44% driven by strength in several of our core industry verticals. In our satellite business we were particularly pleased with the gross margin improvement to 15.8% and with this segment’s solid contribution to our bottom line.

Consolidate revenue for the first quarter was $43.9 million, up 27% compared to the first quarter last year, with wireless DataCom revenue increasing to $31.6 million and satellite revenue of $12.2 million. We are in $0.14 on a GAAP basis and $0.18 non-GAAP. Both revenue and EPS results were well above our initial guidance. In the first quarter we generated operating cash flow of $3.2 million and we ended the quarter with $7.3 million in total cash.

Now, I would like to review our operational highlights for the quarter. The wireless DataCom segment posted record revenue in the first quarter with continued momentum across multiple market verticals. We experienced strong demand for our MRM products and services, which accounted for nearly 70% of total wireless DataCom revenue. Wireless network applications accounted for the remaining 30% of wireless DataCom revenue with significant contributions from our rail transportation products.

In MRM applications, we are gaining market share for our products and solutions as we continue to exceed market rates of growth. As in recent quarters, we are experiencing strong customer demand for our core fleet management, trailer tracking, stolen vehicle recovery and vehicle finance offerings.

We continue to focus on increasing our international market penetration, with the Navman Wireless supply agreement further expanding our global footprint. MRM revenue in the first quarter was much higher than we originally projected, primarily due to two large contract wins that have aggressive delivery timelines. The first of these involve initial volume shipments to equip the deliver fleet of a national soft drink company, while the second related to the commencement of shipments to equip the service fleet of a national telecom service provider.

At the end of the first quarter, we had almost 1.5 million MRM devices and service with our customers that are supported by CalAmp’s PULS over the year device provisioning, monitoring and maintenance system, which is up from 1.3 million at the end of the fourth quarter.

First quarter results for our MRM bundled solutions business were within range of our expectations. Our bundled network offerings for the vehicle finance and remote start markets had approximately 280,000 active subscribers on our network at the end of the first quarter compared to 265,000 subscribers at the end of the fourth quarter. This subscriber base provides a recurring revenue stream that currently represents about 10% of our wireless DataCom revenue.

In our wireless network’s business, we had steady revenue growth in the first quarter among our broad based customers in the utility and oil and gas markets, with key contribution from shipment of mission-critical telemetry radios to a global energy company to equip their oil field operations across the Anadarko basin. And although our public safety business remains softer in the first quarter, bidding proposal activity is picking up which suggests that we maybe in the early stages of recover in this market.

Within the rail transportation vertical, we experienced a record revenue quarter with significant shipments on the final phase of the positive training control preproduction contract. At the end of the first quarter, we had $3 million of shipments remaining on our $19 million PTC development contract, which we expect to complete in our fiscal 2013 second quarter. In addition, last month we announced that we had received our first commercial production follow on orders for the PTC program. These initial orders totaling $5 million are to supply interoperable PTC radios to two Class I North American railroads. These initial orders should help facilitate a smooth transition from the product design and preproduction phases to full scale production. In addition to these PTC radios, we expect to extend our full suite of mobile asset management solutions to the rail market and further grow our revenue opportunities in this important market segment.

Moving on to our satellite segment. We experienced solid performance in the first quarter with revenue of $12.2 million and a gross margin of 15.8%. The improved gross margin profile is due to the transition to a variable cost model that we completed last year, and to the introduction of two new products in recent quarters. There was some degree of quarter-to-quarter revenue volatility can be expected on our satellite segment given its high concentration of sales with a single customer, we expect the volatility could be somewhat dampened due to the expansion of our product portfolio in this market. We anticipate that our satellite business will continue to generate double-digit gross margins and be a positive contributor to bottom line results this year.

Later in our first quarter, we announced the acquisition of the hardware business of Navman Wireless, a global provider of fleet management solutions. In conjunction with this asset purchase, we entered into a supply agreement pursuant to which Navman agreed to purchase a minimum of $25 million of products from CalAmp over a five year period. We also gained a 14-person R&D team and designed center in Oakland, New Zealand. This acquisition, our first in five years reflects our renewed financial strength and the momentum that we are experiencing in our MRM business. The assets acquired include technology for Mobile Display Terminals or MDTs that will complement and expand our existing MRM product portfolio and allow us to market enhanced platform solutions for fleet management, thereby expanding our served market. The Navman supply agreement, which was finalized just prior to quarter end accounted for first quarter revenue of approximately $500,000.

Across all businesses, we expected that our focused R&D investments will continue to drive new and innovative products to market at an accelerating pace over the coming quarters preserving our technology and product leadership position in mobile resource management and industrial machine-to-machine applications.

We are making incremental investments in software resources as well as utilizing our recently acquired design center in New Zealand to give us increased capacity to bring innovative products to market and fuel the future growth of our wireless DataCom segment.

The high value CalAmp brand and our state-of-the art product portfolio position us well to serve larger enterprise customers intend on rolling out new secure, turnkey solutions that enhance their business processes and improve the efficiency of their operations. We are now seeing larger opportunities as we continue to nurture channel partnerships with global reach and develop differentiated solutions tailored to diverse enterprise applications.

We will continue to focus our resources on those markets and applications that we believe have excellent long term growth prospects, addressing them with products and services that we believe have sustainable competitive advantages. The results of the latest quarter are a clear expression of the transformation that CalAmp has undergone over the past several years to once again be a growing and profitable enterprise with a strong sales pipeline and solid momentum.

With that, I will now turn the call over to Rick Vitelle, our Chief Financial Officer for a closer look at our first quarter financial details.

Rick Vitelle

Thank you, Michael. I will provide a summary of our gross profit performance, income tax position, working capital management and cash flow results for the fiscal 2013 first quarter.

Consolidated gross profit for the fiscal 2013 first quarter was $13.7 million, an increase of $4.3 million over the same quarter last year predominantly as a result of higher revenue. Consolidated gross margin increased nearly four points to 31.2% in the latest quarter from 27.3% in the first quarter of last year primarily as a result of the significant improvement in the gross margins of our satellite business.

Looking more closely at gross profit performance by recording segments, wireless DataCom gross profit was $11.7 million in the first quarter or 37.1% gross margin. This compares with gross profit of $8.6 million or 39.0% gross margin in the same quarter last year. Whilst DataCom gross profit increased on higher revenue, while the gross margin percentage decline mainly because last year’s first quarter included approximately $500,000 of non-recurring license revenue for which there was no corresponding costs.

Our satellite business had a gross profit of $1.9 million in the first quarter or 15.8% gross margin. This compares to gross profit of $828,000 in the first quarter last year. The significant improvement in gross profit and gross margin are attributable to the conversion of this business to a variable cost operating model as well as the broadening of the product base.

Now, let’s take a look at CalAmp’s income tax situation. In the latest quarter we recorded income tax expense of only $9,000, which represents minimum State income taxes. No Federal income tax expense was recorded in the first quarter due to the existence of net operating loss carry forwards. At the end of fiscal 2012, we had NOL carry forwards of approximately $70 million for US Federal income taxes and $87 million for State income taxes, which we expect will shelter substantially all of our tax flow income for at least the next few years. Consequently, we expect that our actual cash payments for income taxes over this time period will be quite small and will average perhaps 1% to 2% of our tax flow income.

The tax benefits of the NOLs along with tax credits carry forward and book tax temporary differences comprise our total differed tax asset balance which amounted to $51 million at the end of fiscal 2012. A differed tax asset valuation allowance was established in prior years during periods when we were not able to demonstrate that the company could generate sufficient future tax flow income to utilize all these tax benefits. The valuation allowance had a balance of $39 million at the end of fiscal 2012.

As a result of CalAmp’s return to profitability, the valuation allowance is being reduced as we generate tax flow income and utilize NOLs in the current fiscal year. In addition, at the end of this fiscal year, we expect to make a substantial reduction in the differed tax asset valuation allowance in order to recognize for financial reporting purposes the tax benefits associated with most of the remaining NOLs and tax credits that we expect to utilize in future years. Once we get closer to the end of this fiscal year, we will provide an estimate of how much we believe this fourth quarter income tax benefit will be. Beginning next fiscal year, we expect our effective income tax rate will revert to a more typical level of around 40% based on full Federal and State statutory tax rates even though our actual income tax payments are expected to remain very low for the next few years because of the NOLs.

Next, looking at bottom line results. GAAP basis net income in the first quarter was $4.2 million or $0.14 per diluted share. Our non-GAAP net income in the first quarter was $5.3 million or $0.18 per diluted share. Non-GAAP earnings excludes the impact of intangible asset amortization and stock based compensation expense and includes an income tax provision that reflects tax paid or payable for the period. For a reconciliation of the GAAP and non-GAAP financial results, please see our first quarter earnings press release that was issued to today which is available on our website.

Now moving on to the balance sheet. Our total inventory at the end of the first quarter was $14.6 million representing annualized inventory turns of 8 times. At the end of the immediately appreciating quarter inventory was $10.1 million, which represented annualized inventory turns of 10 times. The reduction in inventory turns is primarily due to an inventory ramp up in the first quarter in our MRM business in response to increasing demand.

The consolidated accounts receivable balance was $14.4 million at the end of the first quarter. This represents an average collection period of 38 days, which is consisted with our receivable’s collection rates over the past few quarters.

As of May 31, 2012 cash and cash equivalence totaled $7.3 million, an increase of $1.7 million from the end of the preceding quarter. Net cash provided by operating activities was $3.2 million for the first quarter. In addition to cash generated by operations, our primary source of liquidity is the $12 million credit facility which Square 1 bank. At the end of the first quarter we had $2.8 million outstanding under a bank term loan and the unused borrowing capacity on the revolver portion of the credit facility was at full availability of $9.2 million. The bank term loan is repayable at the rate of $100,000 per month.

Our total outstanding debt at the end of the first quarter was $5.9 million comprised of the $2.8 million bank term loan and the $3.1 million carrying value of the non-interest bearing note payable that was issued as part of the purchase consideration for the Navman Wireless asset purchase. The Navman note payable which has a face amount of $4 million is payable in the form of sales price rebates as sales are made to Navman under the five-year $25 million supply agreement. Excluding the Navman note payable, we ended the first quarter with a net cash balance of $4.5 million.

With that, I will now turn the call back over to Michael for our guidance and some final comments.

Michael Burdiek

Thank you, Rick. Now let’s turn to our financial guidance. Based on our most recent projects, we expect fiscal 2013 second quarter consolidated revenues in the range of $41 million to $45 million. We anticipate that our wireless DataCom second quarter revenue will be up significantly year-over-year and up moderately on sequential basis, and we expect satellite second quarter revenue will be up year-over-year but down somewhat sequentially.

At the bottom line, we expect second quarter GAAP basis net income in the range of $0.09 to $0.13 per diluted share and non-GAAP net income in the range of $0.13 to $0.17 per diluted share.

And in closing, I’d like to recap some key points drawn from our recent results and latest developments. First, the wireless DataCom segment posted impressive revenue growth, 44%, driven by strength across several of our core verticals, with particular momentum in MRM and significant contribution from our rail transportation initiative.

Second, in the satellite business segment, we were pleased with the revenue results and especially the gross margin improvement which provided a solid contribution to the bottom line. Going forward, we expect this business segment will continue to generate double digit gross margins and be a positive contributor to bottom line results.

Third, we are increasing our R&D investments, particularly in software development to give us increased capacity to deliver innovative products to market and fuel the future growth of our wireless DataCom segment. And fourth, in the first quarter we generated operating cash flow $3.2 million and ended the quarter with $7.3 million in total cash. Our strengthening balance sheet has formed a solid foundation for further execution of our strategic growth initiative in core markets as well as in new and emerging applications.

We are now realizing the benefits of our focus strategy on key market verticals that offer attractive long term growth prospects. Our momentum is building and our competitive position is strengthening as we broaden our product portfolio and pursue opportunities for integrated hardware and software solutions for ever larger global enterprise customers. We expect that our continued effective execution to meet growing market demand for state of the art machine to machine connectivity will drive profitable growth through fiscal 2013 and beyond.

That concludes our prepared remarks. Thank you for your attention and at this time I’d like to open the call up to questions. Operator?

Questions-and-Answer Session.

Operator

(Operator instructions). Your first question comes from Mike Crawford. Your line is open.

Mike Crawford – B Riley & Company

Thanks. First, Michael I’d like to talk about how you view what portion of your business, how you view the recurring nature of your business. So you have these 280,000 Aircept subscribers that comprise about 10% of wireless DataCom revenue, but I believe also much of your business is repeat business from repeat customers. Can you just comment on that, please?

Michael Burdiek

Sure. Yeah, I mean the true recurring revenue percentage is roughly 10% of wireless DataCom revenue as you point out. But the reality is that a good deal of our MRM products business is in effect recurring revenue. Once we’re designed into a fleet service provider’s application, generally speaking those customers tend to stick with a single supplier for those specific types of applications. There are fairly high switching costs once the hardware device has been integrated into the cloud based computing platforms and the fleet service applications. So the business tends to be very sticky. So a large percentage of our MRM revenue is in effect recurring business with existing customers.

Mike Crawford – B Riley & Company

Okay, thank you. And then on the rail opportunity, so you have 3 million remaining on the high margin development contract and then what might be a relatively smooth transition to production. But what sort of margin drop-offs should we look at, at least initially as you improve costing and manufacturing of this equipment?

Michael Burdiek

Well, we do expect the early production business to be at somewhat lower margin than we’ve experienced with the recent pre-production radio shipment. But we do expect that we’ll still be in the range of our wireless DataCom gross margin profile, which is roughly 30% to 50%. It’s probably towards the lower end of that range, at least initially. Over time, hopefully we’ll have the opportunity to reduce costs and find additional efficiencies to help improve the gross margin profile, but also we hope to be able to augment our current radio offerings into the rail market with other products and services that will over time accrete overall margins for the rail sector.

Mike Crawford – B Riley & Company

Okay, thank you. And then what percent of the business in say in the past year has been attributed to public safety versus where you think that could be going forward? And what in particular are the signs of activity pickup that you’re seeing in that market that used to be a much more significant portion of your business?

Michael Burdiek

It certainly was at one time a more significant part of our business and in our fiscal Q1 it was very minimal. Legacy private radio systems which is a little bit of a surprise to us, but more importantly we’re seeing a fair amount of early demand for D block related LTE router platform. And so there’s a good deal of quoting activity underway for those types of products.

Mike Crawford – B Riley & Company

Okay. Thank you very much.

Operator

Your next question comes from Marc Robins. Your line is open.

Marc Robins – Catalyst Research

Thank you. A very good quarter. It’s wonderful after three, four years to see such a successful run of operations. Just great job everybody. Thank you. Tell me a little bit about the satellite business. Are we seeing any kind of new R&D work going on in that area? And I don’t mean to be an ingrate, I’m just wondering if new developments are still underway.

Michael Burdiek

Well, we always have product development activities underway for the business and as you know and we talked about on last couple of earnings calls, we’ve released a couple of new products that have been shipping in volume.

Marc Robins – Catalyst Research

And seem to have some pretty good success I might add.

Michael Burdiek

Indeed and the current focus is on really two different product development initiatives. One is a product refresh initiative that would allow us to introduce a lower cost product as a replacement for our mainstream or mainstay legacy product that we’ve been shipping in volume for almost five years. And then we also have another development underway which we hope to get into qualification sometime later this year that will help expand the served markets slightly by giving us better geographic coverage. That’s essentially a brand new product development.

Marc Robins – Catalyst Research

Okay, thank you. And then changing perspective here, let’s talk about the railroad arena, something that you kind of piqued my interest. You said other products and services. You want to expand on that at all? I know you’re trying to do more commercial oriented kind of products other than those that might be mandated by the government. I was wondering if you wanted to say a little more about what those might be and what the services might be.

Michael Burdiek

Well, we still believe that there’s a good opportunity for us to sell a range of MRM products into the rail marketplace, either directly or through our existing set of fleet management service provider partner. We have a nice tap into that market now through our PTC engagements and so we believe longer term that’s a good opportunity for us. But also we believe that there will be other developing opportunities around the PTC initiative itself as that ecosystem begins to develop. And so we’re hopeful that we can do a lot more than just provide radio, potentially providing software and other engineering types of services as that PTC ecosystem develops.

Marc Robins – Catalyst Research

And this would still be in the lines of MRM kind of classification?

Michael Burdiek

Not necessarily. Could be PTC focused.

Marc Robins – Catalyst Research

Okay, interesting. With the two orders that you currently have received which are now added up to something over the $5 million number, has that spurred other interest from other railroad operators for equipment?

Michael Burdiek

I wouldn’t say those orders have spurred activity. I think each of the rail operators are operating somewhat independently in terms of their respect of PTC rollout plans. But we’re involved in a good deal of quoting activity now and we hope that we can book some additional orders over the coming quarters that would result in added revenue for this fiscal year.

Marc Robins – Catalyst Research

Okay. And then I’ll get back in the queue, but I’ve got one more quick one. Are we still looking at, what is it, December 2015 for this whole positive train control system to be employed?

Michael Burdiek

To the best of our knowledge that deadline has not yet changed.

Marc Robins – Catalyst Research

Okay, thanks and as I said I’ll get back in the queue.

Operator

(Operator instructions). And your next question comes from Gene Weber. Your line is open.

Gene Weber – Weber Capital Management

Hi Michael and Rick. Yes, my congratulations again, great quarter. Love to see those pre announcements. They’re not happening enough with my other companies. My one question just relates to what you mentioned about the MRM business. You said it was particularly strong because you had two large wings with aggressive timelines and then you mentioned the verticals. Could you mention a little bit more about those applications and why the timelines were aggressive?

Michael Burdiek

Well, both of those opportunities they’ve actually been brewing in our pipeline for almost a year and as so often the case, when a customer decides they’re finally going to order product, they want it right away and we happened to have two of those hit sort of at the same time. So we had a fair amount of visibility on the opportunity, but the timing was uncertain given the length of time it took for those respective customers to make their ultimate decisions as to how they were going to deploy the product.

Gene Weber – Weber Capital Management

And did you satisfy those orders just this quarter or do they have a couple of quarters to run?

Michael Burdiek

Well, both opportunities will probably spill over into Q2. The soft drink fleet application, most of that business was in Q1. The telecom service provider opportunity, that’s going to be more of a steady state opportunity, probably over this fiscal year. But it was somewhat front end loaded in Q1.

Gene Weber – Weber Capital Management

Okay. And could you just take a second to say what the applications were? Were these fleet, tracking, telematics? Or just what are they trying to do with your equipment? I guess that’s the easiest way to asking it.

Michael Burdiek

Initially, classic, mid-duty to heavy-duty fleet management applications. In both cases, longer term there could be some opportunities to augment the initial installation with additional asset tracking capabilities, but that’s probably sometime down the line.

Gene Weber – Weber Capital Management

Okay. And you were, if you will, the prime contractor here. This wasn’t through a customer of yours that this was sold, or was it?

Michael Burdiek

No. in the soft drink fleet case it was through one of our traditional fleet service providers. So they were our channel partner there. For the national telecom service provider, that was somewhat of a direct engagement where they’re basically selecting hardware independent of the software application solution provider.

Gene Weber – Weber Capital Management

Got it. That’s very helpful. Well, good. Keep those up. I assume that – you’d mentioned that telecom is going to continue to run and in your pipeline, do you have other types of opportunities like this that can pop up and surprise you every once in a while?

Michael Burdiek

Well, if there are surprises, probably not. But we do have other large opportunities in our pipeline which we hope to realize at some point in time and I wouldn’t doubt that they’d have sort of the same sort of dynamics associated with them whereby they would request that we expedite deliveries and front end load the opportunities.

Gene Weber – Weber Capital Management

Okay. And just last question. Could you give us any sense as to just what type of quantities we’re talking about here? How many vehicles you’re talking about or the range of vehicles that might be involved?

Michael Burdiek

I actually don’t know the exact quantities. But I think in both cases it’s in excess of 10,000.

Gene Weber – Weber Capital Management

The full implementation will be in excess of 10,000 vehicles?

Michael Burdiek

Yeah.

Gene Weber – Weber Capital Management

Wow, that’s great. Okay, well congratulations again guys. Keep it up.

Operator

Your next question comes from Marc Robins. Your line is open.

Marc Robins – Catalyst Research

Thank you. In the MRM arena, who might be some of your competitors that would supply equipment like that being used on the soft drink distributor or the wireless phone repair operation?

Michael Burdiek

Well, there are a number of small hardware providers that focus on fleets and then we have one mainstream competitor that really goes across the MRM verticals, Enfora which was acquired by NovAtel, it’s...

Marc Robins – Catalyst Research

Okay. But mostly it’s smaller folks and then this one larger one. Is that correct?

Michael Burdiek

Domestically that’s generally the case, yes.

Marc Robins – Catalyst Research

Okay. All right, then that helps describe that. Foreign sales, with all the hubbub in the news, I was just wondering if there had been any sign of softness or change in the company’s perspective on how foreign sales are being affected or viewed rather.

Michael Burdiek

Nothing discernible. We had relatively little exposure to Europe and of course most people are concerned about Europe. So in that sense we’re somewhat immune to what’s going on there.

Marc Robins – Catalyst Research

Okay. And then lastly and please don’t think of me as ungrateful, but yes, the company’s cash position is much improved. The balance sheet is much improved. You’re $170 million some-odd – running at $170 million some-odd kind of a run rate if you will and this question was posed when we were at dinner six months ago maybe so it’s a good question to ask. Has the board thought seriously about a dividend policy? And I know that there are probably those listening on the phone call thinking what kind of crackpot question is this, but in my observations, there really seems to be a change in what kind of companies are getting attraction right now and getting traction in the market. And being a long term observer of CalAmp and shareholder, maybe it might be well considered to return something to the shareholders rather than the gains and not gains if you will that we’ve experienced over the last – well since 1993 when we started following it as a research and owned it in the early or late ‘80s as a portfolio manager.

Michael Burdiek

A question and comment all in one. We’re hardly to the point from a cash perspective to consider anything like a cash distribution policy.

Marc Robins – Catalyst Research

I’ll grant you that.

Michael Burdiek

We would love to be in a position where we would consider something like that. We’re not there yet. Our first priority is to continue to invest in our growth initiatives. We think that there’s a lot of gas left in the tank in terms of opportunities we can exploit in the markets we currently serve. So that’s our first priority for use of cash.

Marc Robins – Catalyst Research

Okay. Any other comments in that regard? Are they not so much – not as much anymore organically than things that have to be done outside or?

Michael Burdiek

Well, it’s any or all of the above. Our objective, our fiduciary responsibility is to produce positive return for our shareholders and we’ve probably done a good job of that over the last year as is reflected in the current share price. So long as we continue to execute, hopefully the kinds of returns we produce for shareholders will be ones that continue to improve over time.

Marc Robins – Catalyst Research

Okay, I’ll let it stand for now. Thanks, Michael.

Operator

(Operator instructions). There are no further questions at this time.

Michael Burdiek

Thank you again for joining us today. We look forward to speaking with you at the end of our second quarter.

Operator

Thank you. This concludes today’s conference call. You may now disconnect.

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